Wow. It’s been two and half years since I first wrote a post titled “The CSR SaaS Industry is Growing Up“. In that post, I focused on events such as capital infusion and business consolidation that demonstrate maturity in a niche software sector. I’m long overdue for a CSR software update.
A lot has been happening. The good news: the industry is alive and well. In fact, Corporate Social Responsibility has become part of the lexicon of stakeholder capitalism, with Wall Street driving corporate and social change through asset management decisions.
The better news: companies have more CSR software options than ever. AND nonprofits wanting to develop CSR fundraising strategies now have some help. The intersection of social good and technology creates an almost infectious marketplace of opportunity for talented, creative people wanting to make a difference. There will always be a home for innovation in CSR.
So, what’s been going on?
For this CSR software update, I’m going to touch on the same 6 take-away topics that I presented in the prior post. Each topic, however, includes plenty of new insights. Let’s get going …
1. Capital is focused on the CSR SaaS industry
Boy was that true then, and even more true now. The 800 pound gorillas of CSR technology are now front and center. Salesforce continues to muscle its way into the market through Salesforce Philanthropy Cloud, an initiative begun in partnership with United Way. From product concept to maturing platform, SPC features check the boxes for most enterprise company CSR programs.
It’s not new news anymore, but in 2019, Blackbaud expanded significantly into the CSR space by acquiring YourCause. YourCause had been the target and facilitator of a market rollup by PE firm Providence Equity.
And not to be outdone, Benevity just recently announced a major investment from global firm Hg, making Benevity the first CSR SaaS unicorn. Quite an accomplishment.
Each of these software platforms raises (or should soon raise) $1 billion or more for charity annually.
2. Market maturity is good for customers
I wrote that statement in 2018, and I still believe it … mostly. Corporate customers today have access to more CSR options, better tools, and newer features. Products are more stable than ever. Global companies can turn to vendors who understand global CSR markets rather than to vendors still trying to figure them out.
I also wrote at the time, however, that with maturity, larger investments are made into security. Also, that greater transparency and accountability prevail. On these points, a couple of recent market developments need to be mentioned.
- Earlier this year, Blackbaud disclosed a ransomware attack that has continued to unfold in the media and led to class action lawsuits involving Blackbaud and some of its customers. From what I understand to date, the attack involved the nonprofit database side of their business, not CSR. This story has more chapters to be written.
- Salesforce just announced the acquisition of Slack, a communication platform widely used in businesses. What does this have to do with CSR software? Potentially nothing. But anti-monopolist blogger Matt Stoller picked up on the acqusition. In his article, Stoller argues that the driver behind the acquisition is competition between tech monopolists (Salesforce and Microsoft). With anti-monopoly interests growing in Washington, D.C. (see Google, Facebook antitrust suits), this story is worth following.
Is market maturity evolving into too much concentration of market power, such that customers face increasing risks from doing business with the largest vendors? It’s too early to tell. But the advice I would give anybody working on a CSR selection is to do your homework and develop a complete picture of your risk tolerance. Every vendor has strengths and weaknesses, and yesterday’s strength can become tomorrow’s weakness.
3. Expect more consolidation … and new entrants
The consolidation part I covered with my above comments about capital focus. Another acquisition or two next year won’t surprise me. Companies like Cybergrants, FrontStream and Bright Funds have been very quiet of late. Meanwhile, StratusLIVE is growing its CSR and workplace giving practice through federated partnerships like local United Ways, America’s Charities and Creating Healthier Communities (CHC). But there have been several interesting new entrants in the app space. This is where innovation is poking its head into CSR. Differentiation and new value propositions can be compelling.
Small and mid-sized companies especially should be taking a look at new players. Here is a short a list to check out, all of which prioritize mobile experiences and can be substantially less expensive than enterprise CSR software.
- Cauze. Cauze started with a foundation and a donor-advised fund, then built app software and launched a company. With some traction, they chose to focus on workplace giving for small business and specialty services like gift cards. The have been in business the longest of the companies mentioned here.
- Givio. Givio is giving software designed for the donor first. Focusing on meeting the needs of the donor, however, becomes the foundation for a platform that can be used by everyone and any organization (company, team or group) wanting to raise funds for charity and share giving campaigns. A mobile-first experience, Givio avoids enterprise software barriers like contracts, upfront fees, and implementations. Companies, nonprofits and influencers can “just give”. (In full disclosure, I am a co-founder of Givio.)
- Millie. Millie has also recently pivoted. Launched as a personal giving app with curated charity relationships, in 2020, Millie moved to the workplace giving arena. Along the way, they appear to be expanding with more traditional web-based workplace giving tools. And you can now give to most or all nonprofits in the US using the Millie software.
4. Differentiation is critical
This is as true now as it was then. As the market leaders expand the breadth of their CSR platforms and turn their eyes to global solutions, opportunities arise when differentiation comes into focus. As I look at the landscape of CSR providers going into 2021, differentiation questions might include:
- How does the software embrace employee/donor engagement? (By the way, if you are interested in the intersection of employee engagement and workplace giving, talk to WeSpire.)
- Are workplace giving programs more a benefit (e.g. allowing employees to give to any charity of their choice) or a call to action (e.g. encouraging employees to raise causes, getting behind company social good brand promises, etc.)?
- How well do your program needs map against the vendor’s software capabilities, and do you end up paying too much for features you rarely use?
- “Where” are your employees/donors? How do you reach them? How do they use technology, communication channels and payment systems? And how do those needs map to vendor capabilities? (In other words, giving via email is NOT differentiating anything.)
Here’s one example of innovation leading to differentiation. Givio takes an anti-enterprise software approach to workplace giving. If a company already uses Slack, then campaigns created in Givio can be shared through a Slack channel to employees. Givio is free. So the company uses existing communications tools, partnered with an easy to use app, avoiding the need for enterprise software contracts and expenses. A second differentiator: Givio also works for nonprofits who want to run virtual or digital fundraisers, or for nonprofits needing a simple solution for their boards and followers to run (workplace) giving campaigns.
Look for more CSR software companies to innovate in 2021.
5. Don’t be surprised if tomorrow’s CSR vendors of choice are not yesterday’s
This is definitely proving to be true. Capital and innovation will continue to disrupt the space. I suspect that the next time I update this blog story, the landscape will look different.
6. PaaS is here
Okay, I need to revise this one. “Not here … yet.” Really depends upon the impact that Salesforce Philanthropy Cloud has over the marketplace, and the influence on product development. Or perhaps a player in the HR PaaS space will get serious about CSR. Success breads copycats. We could also see the influence of Wall Street and stakeholder capitalism push deeper into the CSR SaaS space. This story really remains largely unwritten.
Bringing home the CSR software update
I’m going to end with a statement from my prior post: These are dynamic days for the CSR SaaS industry.
Competition is up, capital is flowing, established vendors are active and consolidating. We have interesting new players to evaluate. And we even have players in the space dealing with “big company problems.” The CSR industry is growing up – indeed!
As always, if we can help you with a CSR question, problem or program, please contact CSR Matters today!